The software industry is expected to be one of the fastest-growing industries this year and beyond. However, not all stocks are good bets currently. For instance, we think their weak financials and bleak analyst expectations make software stocks Snowflake (SNOW) and Verb Technology (VERB) best avoided this summer. Read on.The software industry has been one of the biggest beneficiaries of the COVID-19 pandemic and is capitalizing on the hybrid working and digital transformation trends.
However, the industry’s solid growth prospects are fostering stiff competition among existing and new players in this space. Also, investors’ optimism about the industry’s potential has caused many software stocks to hit valuations that are not justified by their current or expected financials.
Weak fundamentals and earnings growth potential could cause Snowflake Inc. (SNOW) and Verb Technology Company, Inc. (NASDAQ:VERB) to suffer a downturn in the near term. So, we think these stocks are best avoided this summer.